Agro-industry has lifted millions out of poverty in Asia and laid the foundation for prosperity. Can Africa follow suit?

(By Ed Brown)

Although I have worked and lived in many parts of the world, I never lost my love for Ghanaian food with its endless variations. But nowadays, I have to admit my traditional food has ‘gone international’. Is the rice local or from Asia? Where was the grilled tilapia farmed? Are those prawns really from our shores? Where did the beef come from and has the chicken travelled all the way from Brazil?

Increasingly, the foods we eat today form the end product of an often long and involved chain. It is a global phenomenon. More than half the world’s population now live in cities and depend on a far-flung global food industry for their daily intake.

The food industry is arguably the world’s largest. Accurate figures are hard to come by because much of the transaction is cash but the World Bank estimates that the food and agriculture sector contributes 10% to the global GDP. The WB’s estimate for 2014 global GDP is $107.5 trillion; this would make the food and agriculture sector worth over $10 trillion.

With populations rising and incomes increasing, the industry is growing. Africa is very much involved in the mix but at the moment the traffic is going the wrong way – the continent’s annual food import bill is around $35bn. In less than a decade, most Africans will be living in cities – opening up an enormous internal market for food. And all the while, the clamour for more food worldwide will continue to increase.

Yet, food is only one part of the agro-processing sector. Products originating from agriculture, forestry and fisheries including leather, wood, paper and so on are all part of agro-industry.

Globally, the industry is not only vast, it employs billions of people. In countries such as China, it has helped raise more people out of poverty faster than has ever been done before in history. It has also provided raw materials for other industries which in turn has led to undreamt of levels of prosperity for those countries.

Agro-industry is often the first rung of the ladder to fully fledged industrialisation; a ladder Africa must climb in order to transform its economy.

But you cannot have an agro-industry without first having an agricultural base. In Africa, we do have a massive agricultural base but our agro-industry had lagged far behind.

Can we catch up? Our research has shown that fortunately, the train has not yet entirely left the station. With the right policies and incentives, we can catch up rapidly and be on a par with the rest of the world. We can cut a stake in the biggest industry in the world. Imagine the impact this would have on the lives and wellbeing of our populations.

But first the sector has to transform itself. Can it do so? From our perspective at the African Centre for Economic Transformation, the prognosis is good. We are currently undertaking advanced research to build on the recommendations for action we published in the 2014 African Transformation Report.

All that is now required is the right action to match the theory.

Dr. Brown is Director of Policy Advisory Services at The African Center for Economic Transformation (ACET)